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Downstream research joint venture with upstream market power
Publisher(s)
Scopus
Date Issued
2014
Other Contributor(s)
University of the Thai Chamber of Commerce. Research Support Office
Abstract
In a vertically related industry, we examine the downstream firms' incentives to invest in costreducing Research and Development (R&), and to form a Research Joint Venture (RJV), under two alternative structures of input supply: exclusive vertical relations and a single supplier. In contrast to the "holdup" argument, in which downstream firms invest noncooperatively and spillovers are low, R& investments are higher under a single supplier than under competing vertical chains.Downstream firms' incentives to form a RJV are also stronger in the former case than they are in the latter. We identify conditions under which an RJV is beneficial for society. Integrated innovation and competition policies are also discussed.
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This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.
Rights Holder(s)
University of the Thai Chamber of Commerce
Bibliographic Citation
C. Manasakis, E. Petrakis, Vasileios Zikos (2014) Downstream research joint venture with upstream market power. Southern Economic Journal Vol.80 No.3, 782-802.
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